The Following Information Has Been Extracted from the Books of the Salem's

question 66

Multiple Choice

The following information has been extracted from the books of the Salem's Lot Company: Currentassets:
Currentliabilities:
Cash $\quad \$ 86\quad$ Accts payable $\quad \$ 78$
Accounts receivable $\quad 130 \quad$ Wages payable $\quad \quad 68$
$\begin{array}{l}\text { Inventory } \quad\underline{140} \\\text { Taxes payable }\quad \underline{\mathbf{2 8}} \\\text { Total } \quad\$ 356 \\\text { Total } \quad\$ 174\end{array}$ The current ratio for Salem's Lot Company is:

• A) 2.05
• B) 1.48
• C) 0.76
• D) 2.51

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Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option when making a decision.

Scarcity

The basic economic issue arises from endless human desires and needs in a context of scarce resources.

Full Production

The level of production where a company or economy is maximizing its use of resources and operating at its highest efficiency.

Full Employment

Refers to the condition in the labor market where virtually all who are willing and able to work at prevailing wage rates are employed.